Renovating homeowners face new insurance risks

When homeowners are renovating their houses, the process can be a long and rather expensive one. But even beyond the headaches that can come with construction delays and other issues in this regard, one thing many of these property owners don’t often consider is how this work impacts their insurance needs. Having the right kind of coverage over the course of a renovation project can help to significantly protect homeowners’ financial standing in the event that something goes wrong.

One recent incident that highlights just how much of a potential problem this situation can create took place late last year in Ottawa, according to a report from the Ottawa Citizen. In the middle of the afternoon on a Saturday, a 2-storey home that was under renovation caught fire and quickly did a significant amount of damage. The crews that initially responded to the scene ended up having to call for backup. Fortunately, there were no injuries reported as a result of the fire.

Damage to renovated homes can create unique insurance issues.

A few more details Fires are often one of those things that homeowners may file away, mentally, under “It won’t happen to me,” but there is always a risk that something goes wrong to start a blaze in a home, the report said. In this case, while no one was injured, the fire did do some $150,000 in damage, with $100,000 of that coming to the building itself, and the other $50,000 coming to the home’s contents. Unfortunately, the cause of the fire was not immediately apparent, but firefighters were able to extinguish it relatively quickly.

What does this mean for homeowners? The reason there may be a more heightened threat of not just fire, but flooding or other damaging events in a home that’s being renovated is that there are likely many hours in the day in which it is unoccupied. That can make it so that even if an incident isn’t actually completely disastrous – i.e. a fire that causes a total loss – it can still go undetected for hours or even days at a time. That, in turn, can make the damage done more significant, and therefore make it more costly to remediate. Further, these issues that may arise might not fall under owners’ traditional home insurance policies.

For this reason, homeowners who are renovating their properties may need additional insurance coverage to make sure that they’re fully protected in the event of a major incident like this. Reviewing the specific risk factors they may face over the course of the project, and seeing how that fits into their existing home insurance will help to better inform any decisions they’re going to make about coverage during the process. That, in turn, can give owners significant peace of mind as the project goes forward, because they will know that even if something does unfortunately go wrong, they’re going to be far more likely to be insulated from the cost, if not the headaches.